Connecting With Fans... In The Porn Industry?

from the business-models-and-pornography dept

The same professors who recently wrote on the Freakonomics blog about how restaurant innovation thrives without copyright recently wrote another post about how the porn industry is also thriving despite widespread infringement. Even though there is copyright on porn works, with rampant infringement, there doesn't seem to be any evidence of less porn being made these days. The professors make the argument that the overall porn marketplace will likely adapt and change without copyright enforcement, but it certainly won't go away:

Here's a prediction: the porn-tube sites are here to stay, and yet many, many people and companies will continue to produce pornography -- even in the face of virtually uncontrolled copying. Like it or not (and we'll leave the morality of this subject to others), there is huge demand for porn. And although we are not economists, we feel safe in saying that where there is demand, there will be supply....

In short, the porn-tube sites probably won't kill the porn industry. But they will change it. Production is likely to shift even more from "features" to short porn-tube-friendly clips....

They then try to suggest some business models that the porn industry might pick up in the changing marketplace. One is to go upscale (such as an upcoming 3D porn film) that gives people additional "reasons to buy." The other is to focus in on specific niches.

The predictions are a bit simplistic, and economist and Techdirt reader Eric Crampton wrote in to point us to his own attempt at applying my "connect with fans + reason to buy" formula to the porn industry. He finds the suggestions in the Freakonomics article not very workable, and also points out that some of the classic "reasons to buy" probably wouldn't work all that well, at least in some circles. Unlike with musicians, people are probably a lot less interested in wearing a t-shirt highlighting their favorite porn star (yes, I'm sure there are some exceptions, but...).

He then suggests that touring is a possibility -- with online clips being used as enticement to come out and see "live" performances of some kind, though, I would imagine that might not fully work either. I would guess that for most -- "stripping" and "porn" aren't quite the same thing, and while I'm not familiar with how licenses for strip clubs work, I'd have to imagine that most don't allow actual sexual acts between people to happen either. Though, the Freakonomics article does say that some porn actresses use online clips to drive people to come see them strip -- which is a higher margin business.

Of course, a commenter suggests an even more obvious (though very illegal, mostly) form of CwF+RtB: prostitution. Though, that's got all sorts of problems as well.

What surprises me is that one of the more obvious models is mostly left out: straight up advertising. One thing that porn does well is attract a lot of eyeballs. In fact, plenty of online porn sites have supported themselves with advertising for ages. There's no reason for that to change. And, certainly you could think of interesting "tiers" that some top porn stars could use to attract people to pay for greater levels of access, such as private videos, chats and the like. A few months ago, someone had submitted a story about a porn star who was offering special packages on her website where she would attend sporting events with you (I believe for the Phoenix Suns), but I can't find that submission any more.

Either way, I have to concur with the initial analysis. Whatever the business model that comes out, it doesn't seem likely that porn is going away any time soon, even if copyright is totally ignored.

Adds in Porn?

Apparently there's another market for the ladies at least. They can simply tour gentlemen's clubs. According to my co-worker (I swear it's not me, even though I'm an AC) there's a club in town here that works very hard to get big name stars to dance there.

You can imagine the revenue stream that generates. If you have an interest in that industry enough to spend money, then that's the sort of thing you'd be excited to show up for. And you probably wouldn't care that all the prices are tripled or quintupled or maybe even more?

As always, there's lots of ways to make money. It's just about working those ways out.

The porn industry does well because

The thing is that in the porn industry the actors aren't making much money at all, there are no multi-million dollar budgets and there aren't directors making millions...

So it survives on quantity, not quality.

But I could imagine that the demand letters would probably collect a lot more money without much risk of going to court over the infringement. Everyone knows the industry exists, and putting a lawyers face in front of a judge is no big deal... But the threat of having a persons reputation tainted in the community by being drug into court has to have a little pull on the wallet. Kinda surprised that the lawyers haven't figured that one out yet.

In sports memorabilia, there's a term "Game-Used" which means a specific ball, jersey, or clump of dirt, was actually used in a game featuring that player or team. They even cut up game-used jerseys and embed them in collectible trading cards. A local place started doing the same thing with porn. They had game-used props and clothing, along with certificates of authenticity from the studio. You could buy a video, and then buy the dress the star (briefly) wore. I'm surprised this hasn't caught on, given how rabid the hard-core fans are (see any cable TV coverage of the major porn conventions) this would allow the fans to have a reason to buy (and continue to be loyal to that brand/star). It doesn't work at all for the casual just-wanna-spank porn consumer, though.

How it works

"and while I'm not familiar with how licenses for strip clubs work, I'd have to imagine that most don't allow actual sexual acts between people to happen either."

Although I'm not in the business, through a curious set of circumstances I became somewhat familiar with how they work in Oregon (each state is a bit different).

There are two operative rulesets in Oregon. As a baseline, it is legal to operate a business involving live sex shows, just so long as none of the performers are paying to perform (that is, it's not prostitution.)

However, if you want to serve alcohol at such a club, you must adhere to a more restrictive set of rules in order to get your liquor license. Live sex shows are out, but Oregon allows full nudity and for the dancers to touch the patrons (not the other way around), so long as there is no genital contact. This is a ton more permissive than in many states.

If you read the SuperFreakonomics book, you learn a lot more about the industry. Perhaps this article is used to supplement that information. If it's really needed, I'll post about how "street prostitutes are like department Santas"

Also, they have a... unique way of looking at birth control. Gotta admit that their economics books are quite a different way of looking at the world.

Re: The porn industry does well because

"I could imagine that the demand letters would probably collect a lot more money without much risk of going to court over the infringement"

A big problem with the Demand Letter Industry is that people get these letters whether they have infinged or not. The DLI has done nothing to correct their problems, and in many cases have made it worse. For example, in the past some outfits would verify that the file content being downloaded was indeed their copyright material. But this was time consuming and expensive so they began just looking at the filenames. Now I read about cases where letters are sent out based upon an IPAddr being in a swarm. The DLI credibility will continue to suffer until they address this issue. If one of these cases were to make it to court I doubt their "evidence" would be sufficient and this is why they drop cases they think they will lose.

Strip club owners will occasionally pay big bucks to bring in a named star to work the pole at their club.

Ever see the show Cathouse on HBO? It's about the famous Moonlite Bunny Ranch outside of Las Vegas. If you run half of the names of the women on the show you will see that they all have a porn career.

Porn stars, men and women, also work as high end escorts. Mike, you're in California and I bet you have the yellow pages. Open it up to E and find pictures of known porn stars offering to take people out on a date.

Honestly, I think the prostitution model would be the most succesful where legal. Though i know that some sites have started advertising for sex shops and producing live performances. I don't know how succesful they are...

Katie Michaels

Katie Michaels is the porn star who advertised on Craigslist that she had tickets to a hockey game in Phoenix. Her website is Katie Michaels Dot Net.

I think I'm the person who posted about her originally, because she seems to have come up with the CWF+RtB idea on her own, and while it's not what usually gets discussed here, it shows that there's a wide range of businesses that it can be applied to.

Oh, and I also emailed her a link to the site. I wonder if she's been reading up on her options...

Strip clubs

I've gone to a strip club to see a porn star I was a fan of (Cytherea). It was fun, and there was a ton of money on stage for her. Stripping tours would do them pretty well, and I have no doubt that their tours would include other, more illegal and lucrative activities as well.

Re: Re: The porn industry does well because

Not too sure what you mean. I've read some books and articles on the industry. One thing you will find out right off the bat is that the actors, actresses and production people work very hard (whatever you may think of them), they have to as the return on a typical production is quite low compared to mainstream media. They have to work hard, meaning they need to crank out LOTS of new stuff, to make any money, so yeah, its a quantity thing. Like the main stream entertainment industry you need a gimmick or some way to stand out to start making real money. One example is (ex?) porn actress Shane. She started producing a series called "Shane's World" which really took off and now I don't think she's even acting on camera anymore, if she's still even in the business. She's an example, not a rule. Most of these people work very hard to make a little money, and the stereotype is often true, many of them are psychologically broken and addicted to drugs/alcohol. Porn is a hard way to make a living.

Other reasons to buy

One alternative business models that I've seen from one porn company is letting members watching the filming live in person, and another is having a live video feed of the shoot with a live chat with the director where you can suggest what happens next (and they actually listen to suggestions).

Re: Re: Strip clubs

Re: Re: Re: The porn industry does well because

I simply meant that, judging by the products of the mainstream movie business, the amount of money put into a production does not correlate well with production quality. There are many high-dollar heaps of garbage and many low-budget works of genius.

My subjective impression is that the garbage-to-good ratio is very approximately a constant, regardless is production spending.

Porn is one of the classical areas where a 'pay to have more produced' model would work well. In fact since the artistic merits of the work is arguably low, there are schemes that work better than in the music industry.

For example, a famous porn actress could star in a free but short porn clip, with a possibility of 3 different ways it could be extended. Folks would pay .50 or so to vote for their favorite choice, and then a short time later the next segment would be free released as well, with yet another vote for the next segment.

This would produce the porn equivalent of a choose-your-own-adventure, with folks voting with their wallets as to which acts they would most like to see.

Advertising

I'm sure the clips sites are already using advertising as revenue stream. But that pays the clip sites, not the content producers. I still think we'll wind up with a segmented market with lower tier product having commodity status and being shown on the clips sites, and a small number of celebrity performers who can earn money either through touring or by selling off props from their performances and such.

Some really neat ideas in the comments here though for other business models.

It's true.

Yep.. It is true. Some companies are failing to adapt. But myself and others know that the key is to connect with fans and give people a reason to pay. Not just create content and charge money for it.

My site has a thriving community built around it and while it is hard to make yourself stand out from all the free stuff online, part of the fun is coming up with innovative ideas for generating traffic and revenue.

The first thing that came to mind when I tried adding up cwf+rtb + porn is discussing with the fans and voting on the specifics of the next porn scene like the pose, anal, oral etc. whether the fans would like to see it in the kitchen/bathtub/outdoors/etc. which clothing would they like, maybe choose from roleplay templates, in the case of a male performer choose a girl from a few available. Basically give the customers the ability to directly influence the content of each new scene that is being filmed. Add up micropayments as a business model - for example basic one-point vote costs nothing but 10-point vote costs 10 cents. Want to vote 100-points? Sure, spend a buck on that.

I'm not following porn all that closely so there may as well be someone who did that already the idea is pretty obvious.

Live performances is not that great yeah. Strip club customers and porn customers are completely different.

I want to become a pornstar

Re: I want to become a pornstar

I'm from Nigeria and I wish to become pornstar, how do I do it? I'm every serious about it please help me out

First you have to make sure you're attractive enough. Take off all your clothes and run around your neighborhood. Post photos of yourself doing this so we can see peoples' reactions. Then we can tell you what to do next.